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Why MCA Consolidation is a Need For Small Business Owners
Most poeple don’t think about how to consolidate MCA debt before they find themselves over extended with MCA loans. This is because merchant cash advances are designed to give small businesses working funds secured by the sale of future bank and credit card deposits. For businesses who need working capital quickly without a lot of hoops to jump through, this type of loan is tempting.
An MCA isn’t always the right solution, though. Yes, they are an easy loan to get from a credit standpoint, but since the loan approval is largely based on the past 3-12 months of earnings, having a lower than average credit score isn’t typically a factor.
Since these are a higher than average risk loan from a lenders perspective and have a high approval rate, they most often have a higher than average payback. In fact, much higher in most cases. Compared to SBA loans, business credit lines, business credit cards and mid and subprime loans, your payback will be higher.
When business cash flow slows down is commonly when a business begins to feel the strain of the daily merchant cash advance payments. Many time this leads a business owner to secure another MCA. Sometimes this cycle continues until a business owners finds themselves paying back 4, 5 6 or even more MCA loans. This cycle can’t continue obviously, and at some point getting another cash advance isn’t an option. Looking into bankruptcy or seeking bankruptcy alternatives such as business debt relief isn’t usually far behind this realization.
How to Consolidate MCA Loans With Multiple Lenders
An asset based consolidation loan is an option if you have enough commercial or personal real estate or property to properly secure this type of loan. An asset based loan will allow you to consolidate as many MCAs as you have sufficient collateral to cover.
You also have options such as an MCA and business debt restructuring company such as us. Through our restructuring program, we are able to restructure your agreement with your lenders, giving you a more manageable payment and payback schedule. Consolidating your payments into one payment is also part of the restructuring process.
There are also the options of mid-prime funding, private investment banks, and companies that specialize in cash advance consolidations.
Each option will have different requirements for getting approved. It always a good idea to look into the different options in more detail and see which is most fitting for you. You can accomplish this largely through online research and even more so by calling some of the companies or institutions you come across and that look reputable during your research.
Benefits of Consolidating Merchant Cash Advances
Besides the obvious benefit of only having one payment, what are some other benefits of consolidating cash advance loans?
- Many times you can get a more attractive payment schedule. Rather than a daily payment, you could set it up on a monthly payment with the right MCA consolidation.
- You will, most likely, get a lower interest rate.
- Longer payback term. This is great when combined with a lower interest rate.
When you combine the convience of one payment with a longer term and lower interest rate, you can really see the advantage of when you consolidate MCA debt.
Business Qualifications for an MCA Consolidation Loan
The main three things a lender will look at is your current revenue, credit score and how over extended you are with merchant loans.
If your credit score is high enough to qualify and your business cash flow is acceptable, they will begin finding a suitable term that works for both you and them.
If you do not meet the consolidation lenders requirements, then seeking other alternatives such as an MCA debt relief program is a good course of action. The worst possible thing you can do is nothing. Hoping your over extension will get better by itself will only make it worse.
How Does a Reverse Consolidation for MCA Loans Work?
Your MCA payments are made from funds provided by your reverse MCA consolidation funder that they deposited directly into your business bank account. Now, rather than making daily payments, you are making weekly payments. Typically, reverse funding companies give you an extended term as part of their service. This type of help is different from an MCA consolidation loan, but does have the ability to free up cash flow with savings usually ranging between 30%-50%.
List of Common Merchant Cash Advance Lenders We Work With
We don’t only work with the large MCA lenders such as Fundry MCA and OnDeck, we can consolidate MCA debt from all of the lenders below, plus some. If you don’t see your lender on the list, call us to see if they are a lender we can work with.
- Yellowstone Capital
- GRP Funding
- Merchant Cash & Capital, LLC
- Business Loan
- Merchant Capital Partners
- EIN Cap
- Swift Capital
- The Fundworks
- LG Funding
- Lending Club
- Spartan Capital
- Funding Circle USA Inc.
- Rapid Finance
- Reliant Funding
- Fora Financial
- Colonial Funding Network
- BFS Capital
- Next Level Funding
- BMF Capital
- SPG Advance
- Platinum Rapid Funding Group
- IBIS Capital Group
- Lending Valley
- EBF Partners LLC
- Core Business Finance, Inc.
- Velocity Capital Group
- Peak Solutions
- FB Funding, LLC
- Retail Capital, llc d/b/a/ Credibly
- ML Factors Funding
- WG Capital
- Hunter Caroline
- CFG Merchant Solutions
- Business Credit & Capital
- 1st Merchant Funding
How MCA Consolidation Frees Up Cash-Flow
The idea behind consolidating MCA debt through a restructuring program is to allow you to free up incoming cash while, at the same time, paying your loans down faster. It’s crucial that someone who enters a debt restructuring views it in such way. If you are a bad money manager, look into reading 5 Everyday Money Management Tips for Small Business Owners and other similar resources. You can also consider the idea of having someone help you with the business finances, such as a spouse or business partner.
Also, start exploring ways to increase your business revenue. You can look at cost-savings within your business, adding new products or services and gaining new customers or clients. The more you can add to your profit on top of your savings, the better. You will then be attacking your financial problem from both side and get it resolved that much quicker.
No matter what, don’t give up and close your doors without trying. That is unfortunately the fate of too many business owners who could have most likely resolved their debt and been back on track in a shorter time than they may have thought possible. See if a business loan modification or business debt management program is right for you before shutting your doors.
- Debt Management
- Business Debt Restructuring
- Analyzing Business Debt
- Business Loan Modification
- Debt Negotiations
- Network of Attorney
- Commercial Debt Restructuring Strategies
- Debt Counseling Exit Strategies
- Organization Debt Restructuring
- Graduated Debt Relief
- Personal Debt Analysis
Who We Are
Provides a lifeline for over-extended business owners who are drowning in debt.
- Reduce your business debt payments by up to 40%-60%
- Improve business cash flow quickly
- Save your business from closing
We are an American Fair Credit Council alliance member business. We strive ourselve to follow AFCC’s strict Code of Conduct. AFCC has determined that National Credit Partners meets AFCC Alliance Membership Standards.
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